Market Currents
Doug Kass' outlook on stocks grows gloomier with each low volume, vanishing volatility,...
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Tuesday, August 21, 2012, 12:33 PM ETDoug Kass' outlook on stocks grows gloomier with each low volume, vanishing volatility, flat-uppish day. He cites research from Dick Arms showing these sorts of conditions are "almost always" signs of a market top. Are stocks about to have a Minsky ("stability begets instability") moment?
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BUT, when we have a 'moment' (no-one is buying any protection--just look at how cheapo puts have become) people will try to squeeze through the door, only to find that it is very narrow.
I am not in the business of predicting 'moments' and i doubt that Doug is either. His calls are always early, but have proven fairly succinct.
It's fine to be long up here. Just make sure you have an exit strategy that doesn't rely on market liquidity, and which kicks in during the times when the regular equity markets are closed. There's an expense associated with that, but you will find that on a down draft where people are staring at the tape (it's an old fashioned term which only guys like me and Kass still use) in amazement that their entire summer's gain have evaporated in one (limit down) implosion, you will be comfortable with your long.
Doug is probably right. It is like Goldman was doing yesterday: buying umbrella's when the rest of us could not see a cloud in the sky. They weren't doing it because they liked the color of the chute.
This leg up over the past two months feels like strong hands selling to weak hands.
July 3 , Doug Kass stated that fair market value was 1430 ... has he changed his mind ?
June 1 .. chances ".Rip-Your-Face-Apart Rally Are Growing "
OK
Last night I watch CBN.com and they were talking about Israel and Iran. Is that the trigger that gets things rolling? Israel no longer sharing their plans with US because of security leaks in the Obama administration.
Not exactly the time to be buying a market rising on lower volume and after indices rejected their new highs today. And, notice AAPL; what happened there? Get nervous, or maybe set your stops. Kass could be offering good advice.